PREMARATNE
VS
YASAWATHIE AND ANOTHER

SUPREME COURT
EVA WANASUNDERA PC, J.
SISIRA DE ABREW J.
ANIL GOONERATNE J.
SC AP 16/2009
SCHCCALA 168/08
WP/HCCA/KALUTARA 120/2001 (F)
DC. PANADURA 19416/L
JUNE 22, 2015.

Specific Performance - Sales agreement relating to a land - Registered -Consideration deposited with Attorney-at-Law - Request to sign deed - Owner selling land - Trust Ordinance Section - 93- Is the registration of an agreement to sell land of itself notice? - Is the new purchaser bound to perform the contract of his vendor? Is the new buyer holding the property in trust? - When there is a breach of contract - When does the cause of action arise?

The original Plaintiff filed action against the 1st Defendant for specific performance of a sale agreement - which was registered - entered into between them with regard to a land and advance was paid when the deed was executed - and balance was to be paid within 6 months, before that period the plaintiff deposited the balance amount with the Attorney-at-law who executed the sales agreement and informed the 1st Defendant through his Attorney-at-Law to collect the money and sign the transfer. The 1st Defendant thereafter had sold the land to P the added 2nd Defendant, after the Plaintiff instituted action against the 1st Defendant and registering a lispendens. The District judge granted relief claimed by the Plaintiff The 2nd Defendant appealed - the High Court affirmed same.

Held:

(1) Registration of an agreement to sell land is of itself notice.

(2) If the agreement to sell was duly registered the subsequent purchaser must be held to have had notice of it. It follows that under Section 93 of

the Trust Ordinance he must hold the land for the benefit of the Plaintiff to the extent necessary to give effect to the contract The agreement is an existing contract within the meaning of Section 93 and specific performance can be enforced.

(3) The effect of the section is to alter the law to the extent that proof of actual fraud is no longer required in order to enable the person who first registered his contract to enforce it in spite of a subsequent transfer.

Per Eva Wanasundara, PC J.

"The letter to the 1st Defendant by Plaintiff through the Attorney-at-Law to come to his office and sign the transfer is equal to a proper tendering of the purchase price, more so because it is specifically mentioned as such in the agreement to sell marked P2"

(4) When there is a breach of the contract by one party, the cause of action arises at that time and not at a later time.

Per Eva Wanasundara, PC J.

"The added 2nd Defendant has been holding the said property in trust for the benefit of the person who, at the time he bought the property had entered into a contract of which specific performance could be enforced to the extent necessary to give effect to the contract."

Appeal from the judgment of the High Court (Civil Appeal), Panadura.

Cases referred to:

1. Silva Vs. Salo Nona - 32 NLR 81
2. Thidoris Perera Vs. Eliza Nona - 50NLR 177
3. De Silva Vs Senaratne - 50NLR 313
4. Muhandiram Vs Salam - 49 NLR 80

S. Mandaleswaran with P. Peramunugama and Mrs. D Ganeshanathan for the 2nd Defendant - Appellant - Appellant

Hitler Peiris for Substituted Plaintiff- Respondent - Respondent.

Cur.adv.vult.

September 22, 2015.

EVA WANASUNDERA, PC.J.

Questions of law to be decided by his Court was laid down on 20.03.2009 when leave to Appeal was granted. They are as set out in paragraphs 12 (a), (b), (c), (f) and (h) of the Petition dated 15.12.2008. At the hearing of this matter on 22.06.2015, the Appellant's Counsel informed Court that he will not pursue the question of law set out in para (h) of paragraph 12 of the Petition Therefore, the questions to be decided are as follows -

12 (a) Did the Provincial High Court of Kalutara (Civil Appeals) err by holding that the Learned District judge has dealt with correctly the issue reg